Exhibit 10.4
EXECUTION COPY
INDEMNITY AGREEMENT
INDEMNITY
AGREEMENT, dated as of June 28, 2007 (this “
Agreement ”), made by and among Atlas Air Worldwide
Holdings, Inc., a Delaware corporation (“ AAWW
”), Polar Air Cargo Worldwide, Inc. (f/k/a Airline
Acquisition Corp I), a Delaware corporation (the “
Company ”) and DHL Network Operations (USA), Inc., an
Ohio corporation (the “ Investor ”; and together
with the AAWW and the Company, the “ Parties
”).
SECTION 1. Defined Terms
1.1. Definitions.
(a) Capitalized terms used, but not defined herein, shall have
the meaning ascribed to them in the Purchase Agreement.
(b) The following terms shall
have the following meanings:
“
Agreement ” means this Indemnity Agreement, as the
same may be amended, supplemented or otherwise modified from time
to time.
“
AAWW ” is defined in the Preamble.
“
AAWW Working Capital Facility ” means that certain
working capital facility of the Company funded by AAWW in
accordance with the Contribution Agreement.
“
BSA Tax Costs ” is defined in
Section 6.1.2(c) .
“
Company ” is defined in the Preamble.
“
Company Obligations ” means the collective reference
to all obligations and Liabilities of:
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a. |
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the Company for (1) costs of preparing the Preliminary
Closing Statement of Net Working Capital as described in Section
2.6.1 of the Purchase Agreement and (2) any remaining fees
and disbursements due to the Auditor in connection with a Dispute
regarding the Preliminary Closing Statement of Net Working Capital
once the Investor has paid for its allocable portion pursuant to
Section 2.6.3(c) of the Purchase Agreement; |
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b. |
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the Company and the Company Affiliates to pay any brokerage or
finder’s fee in connection with the Contemplated
Transactions, including any brokerage or finder’s fee
pursuant to the agreements and arrangements listed in
Section 3.19 of the Company Disclosure Schedule; |
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c. |
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the Company to pay all costs and expenses directly incurred by
the Company (other than Taxes that are (a) incurred after the
Closing Date or |
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(b) the subject matter of Section 6 hereof or
which are specifically allocated to or indemnified by a Person
pursuant to any of the Transaction Documents) in connection with
the Purchase Agreement, the Transaction Documents and the
Contemplated Transactions through the Closing Date); and |
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d. |
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the Company to indemnify and hold harmless the Investor
Indemnified Persons for any and all Losses incurred by such
Investor Indemnified Persons or any of them as a result of or
arising out of certain events specified in Section 8.1
of the Purchase Agreement, subject to the terms and conditions of
the Purchase Agreement, including Section 8.3 ,
Section 8.4 , Section 8.5 and
Section 8.6 thereof. |
“
Company RD Losses ” is defined in
Section 6.1.2(a) .
“
Contribution Agreement ” means the Contribution
Agreement dated as of the Closing Date from AAWW to the
Company.
“
Controlled Affiliate ” means an Affiliate of a Party
with respect to which such Party exercises (directly or through
Affiliates, which are themselves controlled) either (i) a
majority of such Affiliate’s voting power or (ii) actual
control of such Affiliate.
“
Dividend Note ” is defined in
Section 6.1.1 .
“
Funding Request ” is defined in
Section 5.2.1 .
“
Investor ” is defined in the Preamble.
“
Investor Obligations ” means the collective reference
to all obligations and Liabilities of the Investor under the
Purchase Agreement.
“
Parties ” is defined in the Preamble.
“
Polar ” means Polar Air Cargo LLC.
“
Polar Obligations ” means the obligation of Polar to
indemnify the Company under Section 6.1.1 of the Asset
Conveyance Agreement.
“
Pre-Closing Tax Period ” means all taxable periods
ending on or before the Closing Date and the portion through the
end of the Closing Date of any taxable period that includes (but
does not end on) the Closing Date.
“
Purchase Agreement ” is defined as that certain Stock
Purchase Agreement dated as of November 28, 2006 between the
Company and the Investor, as the same may be amended, supplemented
or otherwise modified from time to time.
“
Refundable Deposit ” is defined in
Section 5.2.1 .
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“
Related Proceeding ” is defined in
Section 7.10 .
“
Tax Costs ” is defined in Section 6.1.2(a)
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1.2. Rules of Construction .
Except as otherwise explicitly specified to the contrary,
(i) references to a Section, Sub-section, Exhibit or Schedule
means a Section, Sub-section, Exhibit or Schedule to this
Agreement, unless another agreement is specified, (ii) the
words “hereof,” “herein,”
“hereunder” and words of similar import shall refer to
this Agreement as a whole and not to any particular Section or
provision of this Agreement, and reference to a particular Section
of this Agreement shall include all subsections thereof,
(iii) the word “including” will be construed as
“including without limitation,” (iv) the words
“party” and “parties” shall refer to AAWW,
the Company and the Investor, (v) definitions shall be equally
applicable to both the singular and plural forms of the terms
defined, and references to the masculine, feminine or neuter gender
shall include each other gender, (vi) accounting terms used
herein and not otherwise defined herein are used herein as defined
by GAAP in effect as of the date hereof, consistently applied,
(vii) references to any Applicable Law, a particular statute or
regulation include all rules and regulations thereunder and any
successor statute, rules or regulation, in each case as amended and
from time to time in effect unless otherwise expressly specified,
(viii) references to “$” or dollars are to United
States currency and (ix) references to a particular Person
include such Person’s successors and assigns to the extent
not prohibited by this Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES
2.1. AAWW Representations and
Warranties . AAWW hereby represents and warrants to the Company
and the Investor on and as of the date hereof that (a) AAWW is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, (b) the execution,
delivery and performance by AAWW of this Agreement are within its
corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene (i) its charter or
by-laws or (ii) any Applicable Law or any contractual
restriction binding on or affecting it and (c) this Agreement
has been duly executed and delivered by AAWW and constitutes the
legal, valid and binding obligation of AAWW, enforceable against it
in accordance with its terms, subject to applicable bankruptcy,
insolvency and laws affecting creditors’ rights generally and
to general equitable principles.
2.2. Company Representation and
Warranties . The Company hereby represents and warrants to AAWW
and the Investor on and as of the date hereof that (a) the
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, (b) the
execution, delivery and performance by the Company of this
Agreement are within its corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene
(i) its charter or by-laws or (ii) any Applicable Law or
any contractual restriction binding on or affecting it and
(c) this Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of
the Company, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and laws affecting
creditors’ rights generally and to general equitable
principles.
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2.3. Investor Representation and
Warranties . The Investor hereby represents and warrants to
AAWW and the Company on and as of the date hereof that (a) the
Investor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio, (b) the
execution, delivery and performance by the Investor of this
Agreement are within its corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene
(i) its charter or by-laws or (ii) any Applicable Law or
any contractual restriction binding on or affecting it and
(c) this Agreement has been duly executed and delivered by the
Investor and constitutes the legal, valid and binding obligation of
the Investor, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and laws affecting
creditors’ rights generally and to general equitable
principles.
SECTION 3. INDEMNITY OF COMPANY OBLIGATIONS
3.1. Indemnity of Obligations
. Effective as of the date hereof, AAWW will indemnify and hold
harmless (i) the Investor and the Company from, against and in
respect of any and all Losses incurred by the Investor or the
Company as a result of or arising out of the Company Obligations
and (ii) the Company from, against and in respect of any and
all Losses incurred by the Company as a result of or arising out of
the Polar Obligations.
3.2. Investor Obligations
Unaffected . The provisions of Section 3.1 shall
not be construed to defeat, impair or limit in any way any rights
or remedies of the Company (or any other Company Indemnified
Person, as applicable) may have against the Investor under the
Purchase Agreement with respect to the Investor Obligations nor
shall the Investor in any way be deemed to have been released from
the Investor Obligations.
SECTION 4. COVENANTS
4.1. Transaction Documents .
AAWW hereby agrees to take all reasonable actions as the parent of
its Affiliates to cause the Affiliates (other than the Company) to
perform their obligations under the Transaction Documents to which
they are a party and to cause the Company to perform its
obligations under the Blocked Space Agreement (other than with
respect to the Liquidated Damages and any Gap Period Damages, each
defined therein), in each case in accordance in all material
respects with the terms thereof, in each case from and after the
BSA Commencement Date.
4.2. Net Working Capital
Covenant . AAWW hereby agrees to provide such assistance and
cooperation to the Company in the preparation of the Preliminary
Closing Statement of Net Working Capital as is reasonably necessary
to permit the Company to perform its obligations under
Section 2.6 of the Purchase Agreement.
4.3. Confidentiality . The
Parties agree that (except as provided herein or in the Purchase
Agreement or contemplated hereby or thereby) the fact of, and the
terms and conditions of this Agreement, and the transactions
contemplated hereby, shall not be disclosed by such Party or its
Affiliates to any third party without the prior consent of the
other Parties, except to the extent that such disclosure is
required by Applicable Law (including any regulatory filings made
with any Governmental Entity) in which case the Party (or its
Affiliates) required to make the disclosure shall allow the other
Parties reasonable time to comment on such disclosure and/or
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seek a
protective order or other appropriate relief (with the reasonable
cooperation of all Parties and their Affiliates) in advance of such
disclosure. Notwithstanding the foregoing, each Party and its
representatives and Affiliates may disclose to any and all persons,
without limitation of any kind, the tax treatment, tax strategies
and tax structure of the transactions contemplated herein and all
materials of any kind (including opinions or other tax analyses)
that are provided to such Parties and their representatives and
Affiliates relating to such tax treatment, tax strategies and tax
structure.
4.4. Non-Compete . From the
BSA Commencement Date, AAWW agrees that prior to the earlier to
occur of the fifth anniversary of the Closing Date or the
termination of the Blocked Space Agreement, without the prior
written approval of the Investor, which will not be unreasonably
withheld, AAWW will not, and will cause its Controlled Affiliates
not to (a) provide, directly or indirectly, to any Person
scheduled airport-to-airport cargo transportation services on the
Core Routes other than through the Company, (b) apply for any
Permit that, if granted, would permit AAWW or any such Controlled
Affiliate (other than the Company) to operate for itself scheduled
airport-to-airport transportation services over the Core Routes,
(c) utilize the Core Routes for the conduct of any business
other than the business conducted directly by the Company or
(d) permit the Company to sell, assign or otherwise transfer
the Core Routes or any interest or rights therein to any Person;
provided , however , that the foregoing shall not
limit the right of AAWW and its Controlled Affiliates to
(i) own, either directly or indirectly, individually or
jointly, up to fifteen percent (15%) of the equity interests of any
Person (other than the Company) that provides scheduled
airport-to-airport cargo transportation services over the Core
Routes, (ii) operate charters on the Core Routes, or
(iii) provide charter, ACMI wet lease or other ACMI services
on the Core Routes (including providing ACMI or such related
services to any Person providing scheduled airport-to-airport cargo
transportation services on the Core Routes) so long as, in the case
of each of the clauses (i)-(iii), AAWW or such Controlled Affiliate
does not bear commercial risk based upon the capacity utilized on
the related flight, but rather is compensated on a per flight or
hourly basis.
4.5. Further Assurances . From
time to time, as and when requested by any Par
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